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Additional safeguard petitions filed

Forrest Laws Farm Press Editorial Staff | Aug 03, 2005

U.S. industry representatives announced the filing of four safeguard petitions aimed at trying to slow staggering increases in imports in eight categories of textile and apparel products made in China.

They said the industry has also re-filed a petition on curtains that the Committee for the Implementation of Textile Agreements, a U.S. government interagency task force, rejected for technical reasons on June 22.

“While the filings of only five petitions were announced today, more petitions will be filed later this year,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, one of the industry groups.

“The U.S. textile industry will keep filing petitions until the United States and China reach a comprehensive agreement to moderate the growth of Chinese textile and apparel imports to a reasonable level through the end of 2008.”

The combined U.S. imports in the 10 categories covered by the announcement totaled $6.4 billion in 2004, with imports from China accounting for $944 million. The imports covered account for 5.3 percent of the $17.8 billion in textile and apparel imports from China and 1.05 percent of the $89.7 billion in imports from the world (including China) in 2004.

In terms of the $196.7 billion in U.S. imports of all goods from China in 2004, these petitions affect only about 0.48 percent of that trade.

The special textile China safeguards contained in China's accession agreement to the WTO give the U.S. government the right to invoke safeguards if the U.S. market is threatened with disruption that will impede the orderly development of trade.

“The U.S. textile industry is simply asking the U.S. government to act within the rights granted to it by China's accession agreement to the WTO,” said Karl Spilhaus, president of the National Textile Association.

Cass Johnson, president of the National Council of Textile Organizations, said the U.S. textile industry was grateful for the Bush administration's approval of seven safeguards in 2005. “Damage, however, is occurring in other categories too. That's why the U.S. textile industry has six petitions due for decision later this summer. It is also why we were forced to file these additional petitions.”

The surge in Chinese exports in these categories released from quota on Jan. 1 is directly attributable to the illegal and unfair subsidies given to their producers in an effort to drive all other competitors out of the market, Johnson added.

“These subsidies include illegal currency manipulation, non-performing loans, state-owned enterprises, reduced or free utilities, shipping, and property taxes, free land and factories, and export tax rebates. No industry playing by free-market rules can compete with an industry allowed to sell into a free-market but not play by free-market rules.”

Johnson said that in the first five months of the year, all U.S. textile and apparel imports from China increased by 64 percent. And, according to Chinese Customs data, as of May 2005, China's textile and apparel exports to the United States are up 85 percent year to date by value.

The Committee for the Implementation of Textile Agreements is a five-member interagency group comprising of representatives from the U.S. Departments of Commerce, State, Labor and Treasury and the Office of the U.S. Trade Representative. At least three agencies must vote to approve any safeguard petition.

Once a safeguard petition is filed, CITA has up to 15 working days to accept or reject the petition on its technical merits. If the petition is accepted, a 30-day public comment then commences, followed by a 60-day CITA decision-making window.

If CITA approves a safeguard petition, by terms of its WTO accession agreement with the United States, a consultation period then begins. If no agreement is reached between the parties, the United States can limit Chinese exports in the safeguard categories to 7.5 percent growth above the level for the previous year.